BUSINESS IN BRIEF 10/10 Vietnamese company debarred from WB’s projects The World Bank announced on October 8 the debarment of Thang Long Infrastructure Development Company for fraudulent practices relating to development projects in East Asia. As per the WB’s decision,  Thang Long Infrastructure Development Company, a privately held company headquartered in Vietnam and  its affiliates, will be debarred for a period of 2.5 years following the company’s acknowledgment of fraudulent practices. According to WB, the company submitted misrepresented documents as part of the bidding process for the Trust-Fund financed Mekong Delta Region Urban Upgrading Project; the Second Northern Mountains Poverty Reduction Project; and the Da Nang Sustainable City Development Project. The debarment is part of a Negotiated Resolution Agreement (NRA) which acknowledges the company’s cooperation.  The 2.5 years debarment came into effect on October 2013. During this period, the company and its affiliates will not qualify for any contract financed by the World Bank Group. As part of the settlement, the company will also need to demonstrate full and satisfactory compliance with the World Bank Integrity standards. $4 bln Vung Ro refinery project launched The adjusted investment certificate for Vung Ro refinery project in the central province of Phu Yen was handed over to the investor, Vung Ro Petroleum, in Ha Noi on October 6. The event also saw the signing of a front end engineering design contract and letter of intent to award EPC works to JGC-Japan between Vung Ro petroleum and JGC corporation. At the ceremony, Deputy PM Hoang Trung Hai evaluated the project as a breakthrough made by the energy industry, contributing to the socio-economic development of the South Central Coast. He also expected that investors will launch next steps of the project and provinces create favorable conditions for the investors. Vung Ro oil refinery will be built in Dong Hoa, Phu Yen Province with total investment of around $4 billion. The plant will produce eight million tons of oil products per year. Aquatic export turnover hits 4.6 bln USD Vietnam’s total export turnover of aquatic products was estimated at over 4.6 billion USD in the first nine months of this year, representing a year-on-year increase of 3 percent. According to the General Department of Fisheries (GDF) under the Ministry of Agriculture and Rural Development (MARD), total aquatic product output was estimated at 4.5 million tonnes in the period, up 2.7 percent over the same period last year. Of the total, sea catch output reached 2.1 million tonnes, up 3.3 percent, and worth an estimated 51.3 trillion VND (2.44 billion USD), while aquaculture produced almost 2.4 million tonnes, up 2.1 percent and valued at 80 trillion VND (3.8 billion USD). In order to maintain the sector’s development in the remaining months of the year, the GDF will promote the popularisation of the Vietnam Good Agricultural Practice (VietGAP) standards for the sustainable development of aquaculture, while multiplying the models of cooperative teams among fishermen, Deputy Minister of Agriculture and Rural Development and GDF General Director Vu Van Tam said at a recent meeting in Hanoi. He added that the sector will also ask localities to keep close watch of the situation in the country’s territorial waters, weather conditions and fluctuation of petrol price, in order to timely inform the Department and the Ministry any difficulties facing fishermen and fish farmers.- Work on refinery-petrochem project to start later October Construction of the Nghi Son refinery and petrochemical project in the Nghi Son Economic Zone, the central province of Thanh Hoa, is scheduled to begin on October 23. The over-9-billion-USD refinery is a joint venture between the Vietnam National Oil and Gas Group, the Kuwait Limited Liability Company of Kuwait, and Idemitsu Kosan Co., Ltd and Mitsui Chemicals Inc of Japan. With a designed capacity of processing 10 million tonnes of crude oil per year, the refinery will use crude imported from Kuwait to produce several petroleum products such as diesel and jet fuel, and petrochemicals such as polypropylene and benzene. The new refinery, the second of its kind after the Dung Quat refinery in the central province of Quang Ngai, is listed by the Government as a strategic project. As the largest foreign-invested project in Vietnam, the refinery plays an important role in ensuring national energy security, especially petroleum products. It is also expected to help lure more foreign investors to Vietnam, particularly those from Kuwait and Japan. As scheduled, Thanh Hoa province will organise a trade promotion conference on October 23-24 to introduce its socio-economic development strategy to 2020 with a vision towards 2030 as well as its incentives for foreign investors. Kon Tum urged to market projects to foreign investors Vietnamese trade counsellors abroad have urged the Central Highlands province of Kon Tum to do more to market its projects to foreign investors and provide them with all necessary information. They made the suggestion at the October 7 workshop in the province, during which Kon Tum asked the trade counsellors to help in attracting foreign investors to the province. The trade counsellors, who are based in France, Japan , the Republic of Korea , Germany , US, Taiwan ( China ), and Singapore , agreed that Kon Tum is in a good position to develop its tourism and economy thanks to its geographical advantages. Lying in the East-West economic corridor, it is well connected with the Central Highlands and the Cambodia-Laos-Vietnam development triangle area. The province is also home to Mang Den eco-tourism area – a landmark tourist attraction and Bo Y international border gate economic zone. They, however, stressed that the province should have clear priority and made proper preparations in terms of infrastructure. Meanwhile, Head of the Ministry of Planning and Investment’s Foreign Investment Agency Do Nhat Hoang asked the province to enhance connectivity with other localities in the region so that investment promotion will become easier. Kon Tum authorities tabled 15 projects that are calling for FDI. The province is also working hard to ramp up infrastructure, improve its competitiveness while holding regular dialogues with businesses in order to clear their hurdles in the shortest time. It has so far granted licences to 128 domestic projects worth over 29 trillion VND (1.38 billion USD) and three FDI projects valued at over 1.3 trillion VND (60 million USD). Khanh Hoa ahead of schedule in export The central coastal province of Khanh Hoa earned more than 863 million USD from exports in the first nine months of this year, surpassing the yearly plan by nearly 8 percent. The foreign-invested sector led the way with 430 million USD, or half of the province’s earnings. The private sector followed, bringing home nearly 363 million USD. Their main export items were cashew nuts, sand, seafood and sea-going vessels. Major markets of Khanh Hoa concentrated in Asia, Europe and America. In the same period, the province imported more than 318 million USD worth of goods, resulting in a trade surplus of 545 million USD. Last year, the province posted 1.14 billion USD in export value and a trade surplus of 518 million USD. However, the target for this year has been lowered to 800 million USD taking into account the global economic downturn. Meanwhile, the national figure for the first nine months of the year was 96.46 billion USD, a 17.5 percent rise over the same period last year.- Nghi Son EZ investment promotion forum planned Thanh Hoa province will grant investment licenses and sign contracts totaling US$4 billion when it holds its Nghi Son Economic Zone (EZ) investment promotion forum on October 23–24. At press briefing in Hanoi on October 8, Thanh Hoa Provincial People’s Committee Vice Chairman Nguyen Dinh Xung said the forum, the first of its kind in the province, will see the participation of large numbers of foreign businesses seeking investment opportunities in the locality.   Xung stressed the importance of the US$9 million Nghi Son EZ project to the province’s socio-economic development. Thanh Hoa will present its 2020 socio-economic development strategy, incorporating a vision extending to 2030 and including a construction plan, a land use plan, a human resources development plan, investment policy, promotional materials, and calls for investment. The forum gives investors the chance to meet with potential partners explore the business opportunities in Nghi Son EZ and adjacent areas, Xung said. He reiterated Thanh Hoa’s six commitments to investors: the best incentives, best support services, most accessible administration, most stable, most harmonious digital environment, and the most development potential. Thanh Hoa’s US$15 billion worth of FDI capital ranks it 6th in Vietnam. The investment is distributed in key projects such as the Nghi Son oil refinery, thermoelectric power plants, and seaports. The province abounds with modern transport infrastructure and convenient connections to international markets, ranging from its Nghi Son deepwater port and Tho Xuan airport to its developed highways and trans-Asian road links to Laos and Thailand. Around 60 foreign investment businesses are currently based there, fuelling an average annual GDP growth rate as high as 10%. Vietnam committed to TPP negotiation success Vietnam will work closely together with other parties to the Trans-Pacific Partnership (TPP) negotiations to reach a complete agreement later this year. State President Truong Tan Sang made Vietnam’s commitment at a high-level meeting of leaders of the 12 TPP member countries in Indonesia on October 8. He welcomed the members’ resolve to conclude negotiations by the end of this year, recommending a flexible and realistic approach to discussions that considers each party’s specific developmental circumstances. He urged TPP members to provide technical assistance and enhance enforcement capacity during negotiations to ensure the opportunities arising from the TPP are not squandered. At the meeting, the participating leaders noted a TPP would cover an area responsible for 40% of global GDP and one third of global trade. They agreed to settle all the remaining issues to complete negotiations later this year so as to reach a comprehensive agreement, taking into account the members’ various development levels. They welcomed the desires of Japan, Canada and Mexico to join TPP negotiations this year. The 12 TPP members are Brunei, Canada, Chile, the United States, Malaysia, Mexico, Japan, New Zealand, Australia, Peru, Singapore, and Vietnam. Together with key regional economic linkages such as ASEAN, ASEAN plus, APEC, and the Regional Comprehensive Economic Partnership (RCEP), a TPP would invigorate dynamism and development, interregional connections, and even lay the groundwork for an eventual Free Trade Agreement of the Asia-Pacific region (FTAAP). Ha Nam offers incentives to Japanese investors The Japanese city of Sakai wants to cultivate positive economic and investment relations with the Vietnamese province of Ha Nam. Sakai International Business Council President Kiyoshi Shirooka expressed his desire at a working session with Ha Nam’s leaders on October 8. He acknowledged the province’s efforts towards meeting the infrastructure demands of foreign investors following a tour of the Dong Van Industrial Zone in Ha Nam province, which houses approximately 40 Japanese investors. The visiting representatives of ten Sakai businesses spoke highly of the investment incentives the province extends to foreign parties and particularly those from Japan. Ha Nam Provincial People’s Committee Chairman Mai Tien Dung noted the rising trend characterizing Japanese investment in Vietnam. He foreshadowed an additional six Japanese businesses plan to invest in the province between now and the end of the year. He highlighted Ha Nam’s incentives for small and medium-sized Japanese enterprises operating in the support industry, going so far as to reserve them special space in Dong Van IZ and Kim Bang district’s Dai Cuong Village. US consumers taste Tra Vinh dragon fruit Tra Vinh Province’s Dai Duc Cooperative has already exported around 2.7 tonnes of red flesh dragon fruit to the US since the beginning of October. The Cooperative recently negotiated the export of an additional 30 tonnes to this lucrative market in 2014. The expanded markets and value surges enjoyed by dragon fruit exporters are partly due to the VietGap cultivation standards Dai Duc Cooperative was instructed in by the Tra Vinh Gardening Association (GA) and the provincial Department of Science and Technology (DST). The DST encouraged farmers to replace older sweet potato, pumpkin, and bamboo crops with the more lucrative fruit. GA President Le Van Be said the province’s 74ha devoted to dragon fruit are spread over Cang Long, Chau Thanh, Tieu Can, and Cau Ke districts. Annual average yields exceed 300 tonnes, 60% of which meet export standards. Tra Vinh started trademarking its dragon fruit varieties in 2012. The work has paid off, with domestic prices reaching as high as VND20,000–25,000 per kilo and earning farmers annual average incomes of around VND300 million per hectare. Hanoi’s first concentrated IT park makes debut The Cau Giay handicraft and small-scale industrial cluster has received a certificate recognising it as the first concentrated information technology (IT) park in Hanoi. At the granting ceremony on October 8, Deputy Minister of Information and Communications Nguyen Minh Hong emphasised the significance of the event as it demonstrates the leading role of the capital city in IT development, laying a foundation for the national economic growth. Over the past decade, Vietnam has seen the establishment of many concentrated technology parks which have so far attracted over 700 businesses and provided jobs for more than 36,000 workers. Over US$141 million has been poured into developing their infrastructure. Founded 12 years ago, the Cau Giay IT park has now become a modern office building complex with 29 buildings completed, said Director of the Hanoi Department of Information and Communications Pham Tu Lan. As many as 29 buildings in the park have been completed, providing accommodations for 85 IT businesses such as the Financing and Promoting Technology Corporation (FPT) and the Military Telecom Corporation (Viettel). In the coming time, Hanoi will have preferential policies to draw more investment in its IT zones, making it an industrial centre of the nation, according to Vice Chairman of the Hanoi People’s Committee Nguyen Van Suu. Green growth a must for Vietnam Leading experts and researchers from a variety of fields shared their diverse views on potential Vietnamese green growth models at a seminar in Hanoi on October 8. They highlighted the lessons to be learned from the country’s recent decades of growth, the successes and failures of post-Doi Moi (Renewal) growth models, and the international context of the looming ecological crisis. Strategic Institute for Natural Resources and Environment Vice Director Nguyen The Chinh summarised Vietnam’s shift from centralised planning to a socialist-oriented market economy, noting the twin goals of economic growth and improved social welfare services. Since the Doi Moi process was launched in 1986, Vietnam’s positive growth has weathered crises and downturns, advancing from a poor nation to its current middle income status. Participating experts highlighted the dangers of the middle-income trap that are sure to arise if economic restructuring and reinvigoration ever subsides. Vietnam should invest in sufficient research resources to ensure its future economic growth model is as well-informed as possible. Any new growth model must recognise the pressing need for environmentally conscious and sustainable development in order to secure both growth and social welfare. Vietnam is especially vulnerable to climate change and regularly suffers storms, floods and tidal surges. Carbon emissions need to be minimised and preparations for rises in sea levels begun. Realising a low carbon economy presents a challenge but could also dramatically increase the value of Vietnam’s natural resource reserves. Thua Thien-Hue: 337 new businesses set up in nine months A total of 337 new businesses were registered in the central province of Thua Thien-Hue during the first nine months of this year, with total capital of more than 1.2 trillion VND (58.1 million USD), a year-on-year increase of 7.2 percent. Added to this, the province has granted investment licences to 18 new projects with registered capital rising by 112.4 percent to over 2.1 trillion VND (100 million USD). It has also licensed five foreign invested projects, four more than the same period last year, worth 41.74 million USD. The outcome is attributable to an array of dialogues between the authorities and the business circle via Thua Thien-Hue’s e-portal at www.thuethienhue.gov.vn. For example, in September more than 200 enterprises received advice and legal assistance in tax related issues. Chairman of the Thua Thien-Hue Business Association Nguyen Mau Chi said that open dialogue will provide opportunities for businesses to raise their voice and submit proposals, so that managerial officials can timely make adjustments to facilitate their operations. In the first nine months of 2013, total social investment capital in the locality rose 9.1 percent to 10.2 trillion VND (485.7 million USD), representing 70.3 percent of the set target. Market watch intensifies fight against violations So far this year, the market watch authorities have made 120,000 inspections and dealt with 62,000 cases that violate market regulations, imposing fines totalling 240 billion VND (11.5 million USD). The Market Management Department under the Ministry of Industry and Trade further said the cases fined include smuggling, contraband, substandard products and those that violate intellectual rights and food safety. Deputy head of the department Do Thanh Lam attributed the situation to the application of more sophisticated methods by smugglers, the shortage of personnel and budget and the low capability of the anti-smuggling forces, and the incomplete system of legal documents. In order to deal with this, the department has worked out plans to intensify the checks and control of the market, especially on the occasion of the coming traditional new year, the most important festival in Vietnam which will come at the end of January next year. Lam further said that from now to the end of this year, the department will closely work with the Pricing Department under the Ministry of Finance to strengthen the control of the market so as to deal with trade frauds, unreasonable price hikes and violations of regulations on product quality and food safety. Deputy Minister of Industry and Trade Nguyen Cam Tu has asked relevant authorities of border provinces to join hands with those of neighbouring countries in the fight against smuggling.- VAMC takes on more bad debts Vietnam Asset Management Company (VAMC) has signed contracts to buy bad debts totaling VND850 billion (USD40.4 million) from three more banks. After initially buying VND1.723 trillion (USD81.9 million) worth of bad debt from the Vietnam Agriculture and Rural Development (Agribank), the company recently bought the bad debt of the tree more banks: Saigon Commercial Joint Stock Bank (SCB), Saigon - Hanoi Commercial Joint Stock Bank (SHB) and Petrolimex Group Commercial Joint Stock Bank (PGBank). These banks all have high rates of bad debt. SHB is estimated at 9% and PGBank at 8%. To date, VAMC has issued bonds worth VND2.57 trillion to the mentioned-above banks. Selling bad debt to VAMC has helped to cut Agribank’s bad debt rate by 7.56%. Agribank has been in the process of completing procedures to receive bonds from VAMC. The vice chairman of VAMC, Nguyen Quoc Hung, said the firm will continue buying bad debt from banks and the banks will be offered bonds at the maximum interest rate of 2% per year, instead of the current refinanced level of 7%. VAMC will priositise the bad debt purchases of three bank groups: state-owned commercial banks, banks with a bad debt rate of more than 3% and those urged to restructure. Economy remains in difficulty towards year-end Vietnam’s macro-economy will still be in difficulty from now towards the year-end as fundamentals constituting growth have not recovered sufficiently, according to the National Financial Supervisory Commission. In a report on the economic situation in the January-September period, the commission pointed out that gross domestic product (GDP) in the third quarter was higher than estimated (up 5.54% from the second quarter), raising the GDP in January-September to 5.14% compared to the growth rate of 5.1% in last year’s same period. However, the economy remains difficult as the credit flow has not been absorbed. Weak domestic consumption has hindered growth, according to the report. The State budget balance is difficult to be achieved, showing fiscal problems for the country. Similar to last year, revenue collected from crude oil continues to be the major factor to compensate the shortfall in other domestic sources. From the year’s beginning until September 15, income from crude oil rose by 7.5% over the initial estimate, helping compensate for drops of 10% and 13% in domestic sources and export-import taxes respectively. Nevertheless, total budget revenues have still stayed lower than the estimate so far. Therefore, to realize this year’s budget target, it is necessary to cut spending and take measures to boost revenues, and reduce tax losses in the rest of the year. In the long run, the commission suggested building a medium-term budget planning framework to ensure sustainability of the State budget, and drawing up a plan to reduce the State payroll. Besides, a balance between regular spending (currently accounting for 67% of total budget spending) and investment-development spending (currently accounting for 18%) needs to be established to increase the amount allocated for investments to foster economic growth and facilitate long-term economic stability. According to the commission, the stable consumer price index (CPI) may be maintained in the coming months. The forex market and exchange rates are forecast to remain stable as the supply and demand towards the year-end will be stable and foreign reserves will rise. An Giang calls for investment in airport project An Giang Province’s government on Thursday called for local and international investors to join its airport project in the public-private partnership (PPP) format. This was one of 11 projects the provincial Department of Planning and Investment introduced at a seminar with Swedish investors in HCMC on Thursday. Local authorities are conducting a feasibly study for the project, which covers 230 hectares in Can Dang commune in Chau Thanh District with total investment of around US$233 million. The breakeven period is expected within 27 years. According to local authorities, An Giang has three international border gates with tourism, seafood and farm produce exports developing strongly. Therefore, the transport system of the province needs to be further improved. Construction of An Giang Airport is necessary to raise transport capacity of the province and the region. In 2011, the Civil Aviation Administration of Vietnam (CAAV) announced the  airport planning for the period until 2020 and vision to 2030. The project will need over VND3.4 trillion of investment. Of which, the capital needed for the period until 2020 is over VND1.48 trillion and the next phase will need nearly VND1.94 trillion, according to the Decision 1166/QD-BGTVT of the Transport Ministry on project approval. By 2020, the airport will have a runway 1,850 meters long and 45 meters wide designed to serve ATR72 aircraft or equivalent planes. CAAV said that the airport in the first phase will serve chartered flights, search and rescue activities and national defense. After 2020, the terminal and runways will be upgraded to support landings and take-offs of Airbus A321 aircraft. The airport will have designed capacity of receiving 300 passengers an hour during high season and transporting 300 tons of cargo per year. Local authorities at the seminar also introduced other projects in the fields of energy and environment. These included a waste treatment plant in Phu Tan District with total investment of US$11 million, another waste treatment plant in Long Xuyen City costing US$27 million and a drainage and wastewater treatment project in Tan Chau commune worth US$26 million. The province also called for investment in Tay Song Hau urban area project covering 65 hectares with total capital estimated at around VND420 billion. Do Hai Long, deputy director of the Department of Planning and Investment, pledged that local authorities will create favorable conditions and a healthy business environment for investors. Top projects reap returns despite slowdown The luxury apartment market has been resuscitated with the sale and construction of new projects, as real estate consultants believe the time is right to re-enter the market. “We believe that this is the right time to be in the market for luxury property on account of its resilience to price fluctuations, and the less attractive nature of asset classes such as falling bank deposit rates, stocks and gold prices,” Richard Leech, executive director of CBRE, told participants at the launch of Hoang Thanh Tower’s mocked-up apartments last week. Developed by Tran Hung Dao Joint Stock Corporation, Hanoi’s Hoang Thanh Tower is located in Ba Trieu street, next to Vincom Towers. As there are no other projects in the surrounding areas for sale at present, the developers are confident to fix prices at more than $4,000 per square metre, making it one of the most expensive properties currently on sale in the country. Domestic developer Tan Hoang Minh last week also started construction on the D’ Le Pont D’or overlooking Hoang Cau lake in Hanoi’s Dong Da district. The company is developing two other luxury properties, the D’ Sans Raffles in Hang Bai street, Hoan Kiem district and D’ Palais de Louis in Nguyen Van Huyen street, Cau Giay district. According to Leech, quality projects in prime location remain attractive to buyers. “Hoang Thanh Tower ticks all the boxes in terms of being the right time to buy. Apart from being nearly ready for handover, Hoang Thanh Tower comes to the market at a time when there are very little or virtually no comparable apartments for sale in Hanoi,” he said. Sharing this point, Do Quang Lam, deputy general director of Tan Hoang Minh Group said that a prime location was the number one selling point and was offered a business advantage for Tan Hoang Minh Group’s real estate projects. Over the years, Tan Hoang Minh has pursued real estate projects in premium locations. According to the country’s leading real estate group Bitexco chairman Vu Quang Hoi, the prime criteria that any real estate investor or buyer paid attention to was the location. The nicer and the more unique location the project has, the greater attractiveness it has and the higher price. Therefore highly priced projects would prove popular, Hoi said. Leech said that the prices of high-end apartments in the city’s central districts had remained resilient despite the downturn in the market. If the market continued to improve overall, then it would next to impossible to buy such high-end apartments at their current prices. “Coupled with the obvious lack of new supply in this sector for the foreseeable future and their location, it leads one to believe that this is a unique opportunity to be buying low as the market starts to pick up, with very limited supply in a capital city location surrounded by quality conveniences,” he said. Green growth sprouts from green investment The fast pace of economic development has serious consequences for the environment and socio-economic development, both on a global and national scale; and the implications of climate change are some of the greatest challenges Vietnam currently faces. After more than two decades of embracing economic reforms, Vietnam has now joined the group of medium income countries. The country has achieved many important United Nations Millennium Development Goals on poverty reduction and hunger eradication. Such development, however, experts have argued, was for the most part rooted in the exploitation of natural resources and less-effective energy usage rather than an efficient economy and added value products and services; a situation that has had a harmful impact on the environment. “The best way to save costs would be via more efficient resources and energy usage and reducing energy losses in production,” said Dr. Romel Carlos, programme manager, Sustainable Energy Finance at the World Bank Group’s International Finance Corporation (IFC) in Vietnam. “However, the lack of financial sources and limited capacity of financial institutions hampers the implementation of sustainable energy projects. There are also limited or no awareness among local people and intermediary management levels about sustainable development,” he said. These issues were acknowledged by deputy head of the Ministry of Natural Resources and Environment’s Vietnam Environment Administration Nguyen The Dong. “Vietnam’s economic growth was mainly based on quantitative rather than qualitative development, featuring high fuel and energy consumption in making products, thereby hurting the environment. Eco-friendly industries are largely underdeveloped. The current usage of natural resources is irrational and profligate, posing a real threat to the environment in a variety of areas,” he said. Power consumption in Vietnam quadrupled in the past decade on the back of vigorous economic development and booming population growth. Critically, while energy demand spiked, energy usage has been ineffective and wasteful, proven through the fact that fuel consumption per product in Vietnam was 1.5 to 1.7 times higher than Thailand and Malaysia. Escalating energy prices have driven up production costs and products and services have become costly which in turn undermined business efficiency, competitiveness and profit margins. The IFC sees the important role of local financial institutions in spurring investments in energy efficiency in Vietnam. The practice in new emerging economies shows that financing efficient energy usage has been and will be a new promising business field for banks. By enacting the Law on Energy Efficiency, the government of Vietnam recognised that improving energy efficiency will lead to better energy security and availability for the country and improved competitiveness of enterprises. The ever increasing energy costs, unstable and inadequate energy supply is resulting in Vietnam’s burgeoning demands for energy efficiency and cleaner production which should pave the way for the financial market to step in. “In the Philippines, the investment portfolio for energy efficiency at the Bank of Philippine Islands jumped to $363 million in just two years,” said Dr. Carlos. Considering the current economic turmoil, banks pioneering strategies and rolling out products to finance energy efficiency will gain an advantage as innovative, and be considered as contributing positively to the sustainable development of the country “Through funding energy efficient projects for small and medium-sized enterprises, banks can both help businesses sharpen competitiveness and boost profits and develop their customer portfolio and increase market share,” the IFC underscored. DJSI recognises SCG's sustainability The 100-year history of sustainability leader and top ASEAN business conglomerate SCG is flourishing thanks to the recognition by the Dow Jones Sustainability Indices. Since its establishment in 1913, SCG has been striving to achieve sustainable development and has been a leader of industry in Thailand and ASEAN. SCG has learned how to adapt to changes and continued to do so against wave after wave of crises and challenges, both domestically and internationally. “Throughout the years, SCG has pledged to develop the innovations of products, services, and processes toward balancing economic, social, and environmental development under the principles of good corporate governance,” said SCG president and CEO Kan Trakulhoon. “SCG is committed to realising this noble cause and becoming a corporate leader within ASEAN and a prime example for companies to follow,” he said. To ensure consistency within the organisation, a Sustainable Development Committee was set up in 1995 and is charged with setting targets and implementation guidelines for each business unit under SCG’s umbrella. In 2008, the committee established the SCG Sustainable Development Guideline for effective implementation and to ensure co-ordination between the different entities co-operating on various projects. With its demonstrated commitment to conducting business in tune with the sustainable development approach, SCG has been a member of the Dow Jones Sustainability Indices (DJSI) since 1998 and has been ranked as a Gold Class performer for six consecutive years since 2008. The DJSI was the first world-wide index to evaluate the efficiency of businesses according to their sustainable development practices. DJSI’s listings and information are put to use by various institutions and funds around the world in evaluating their investments. The indices informs investors about corporate efficiency, not only based on profits, but on sustainability. Investors can be confident that listed companies will generate strong, sustainable returns. The DJSI attaches great importance to freedom, transparency, and credibility. Its criteria were established by Robeco Sustainability Asset Management (RobecoSAM), an independent organisation with specific expertise in the field. The criteria also include assessments by other external organisations. “SCG is the only company in ASEAN to be honoured with the ranking of Global Sector Industry Leader in Sustainable Development in the Construction Materials Industry on the DJSI for three consecutive years since 2011,” said Trakulhoon. “SCG is proud to be recognised for the value of its sustainable development efforts and it is our intention to continue this in the future with the goal of ever-higher standards and expanding its implementation to Vietnam,” he continued. SCG has implemented initiatives for its subsidiaries in Vietnam applying the principles of sustainable development through the innovations of high added value and environmentally friendly products and services as well as the development of green manufacturing processes, such as the use of new technologies to reduce energy consumption. Moreover, SCG has a range of social sustainability initiatives aimed at building communities and providing opportunities to the Vietnamese youth, which is part of the group’s sustainable commitment. “SCG is steadfast in its belief that these efforts will develop into a sustainable business network, as it contributes to steady economic growth at the business, national and regional levels,” Trakulhoon concluded. Import-export turnover to Europe fetches US$28.5 billion Vietnam’s import-export turnover to Europe reached US$28.5 billion in the first nine months of this year, according to the Ministry of Industry and Trade (MoIT). Of the figure, Vietnam’s exports to the region earned US$20 billion and its imports were estimated at US$8.5 billion. The European market also has the fastest export growth among Vietnam’s export markets with a 26 percent growth rate on last year’s same period. Vietnam’s trade turnover with Europe is predicted to achieve about US$40 billion (US$28.6 billion from exports and US$11.5 billion from imports) by the end of this year, respsenting an annual increase of 21%.  The country’s major European export markets in 2013 will be Germany with estimated export earnings of US$4.6 billion, the UK (US$3.3 billion), the Netherlands (US$2.7billion), France (US$2 billion) and Russia (US$1.8 billion). Japanese group launches new Dong Nai factory The Japanese company Kobelco Eco–Solutions has inaugurated its US$ 30 million Long Duc Industrial Park factory in southern Dong Nai province on October 4. This is the company’s second Vietnamese factory, joining a Long An province facility opened in 2012. The factory is designed to service the demands of Southeast Asian and Japanese chemical, pharmaceutical, and electronic material industries. The Long Duc Industrial Park has attracted investment from the Japanese Japanese groups Sojitz Corporation, Daiwa House Industry Ltd, and Kobelco Eco–Solutions, as well as the Vietnamese Dong Nai Import Export Processing Agricultural Products and Foods (Donafood) firm. All but one of the park’s 16 projects are owned by Japanese enterprises, representing total capital exceeding US$617 million. Seminar explores African and Middle Eastern business opportunities Central Highland and Central provinces have discussed their efforts to explore industry and trade opportunities in Africa and the Middle East at a seminar convened on October 4. According to the Ministry of Industry and Trade’s Africa, West Asia, and South Asia Market Department, Africa and the Middle East are rich in potential for Vietnamese importers and exporters. Current key provincial exports to these market include coffee, rubber and rubber products, timber, pepper, chemical products, plastics and plastic products, seafood, garments & textiles, ceramics, and farm produce. Delegates used the event to express concerns regarding the African and Middle Eastern markets’ current instability and urged the relevant agencies to facilitate the market expansion ambitions of regional businesses. Tran Quang Huy, the Africa, West Asia, and South Asia Market Department’s Deputy Director, said local export and import enterprises still encountered difficulties when doing business in Africa and Middle East. Some companies have curtailed or even suspended their operations. Regional enterprises should pay attention to incentive policies and monitor emerging opportunities and challenges while ensuring they gather the most up to date information possible about their targeted markets. Agricultural products face tough competition in RoK Vietnam’s agricultural exports are facing fierce competition from regional rivals including Thailand, Indonesia, Cambodia, and Myanmar in the Korean market. According to Le An Hai, Deputy Director General of the Ministry of Industry and Trade’s Asia-Pacific Market, Indonesia and Thailand benefit from experience and professional expertise, while emerging exporters like Cambodia and Myanmar enjoy much more flexible pricing strategies. Vietnam’s rubber exports to the RoK have doubled in value over the past 12 years. But last year’s rubber exports were still six times lower than Thailand’s, the RoK’s market leader. Hai argued that Vietnam can benefit from the waning Chinese vegetable and seafood export dominance caused by rising prices and unreliable hygiene and safety. He said the country’s agricultural products would be promoted more effectively if businesses approach RoK trade representatives at companies with an established presence in major Vietnamese cities. Vietnam’s US$73.828 million worth of coffee exports placed it second in the RoK market. Vietnamese seafood exports were also second, behind China, while its US$101 million in rubber exports ranked fourth. Foreign airlines eye Vietnam A selection of international airlines including Etihad Airways (Middle East), SpiceJet (India), Ethiopian Airlines (Ethiopia), and a South African carrier have all foreshadowed plans to begin flights to Vietnam in response to growing customer demand. Nok Air, a Thai low-cost carrier, recently announced its intention to conduct flights between Bangkok and Hanoi and Ho Chi Minh City from 2014. The airline opened commercial routes from Bangkok to Hanoi in 2007 but was forced to suspend its operation in 2008 due to high fuel prices. Civil Aviation Administration of Vietnam (CAAV) Deputy Chief Vo Huy Cuong said many foreign airliners are keen to exploit air routes to Vietnam and CAAV has no policies limiting foreign airline flight frequency in Vietnam. Vietnamese airlines’ growth rates are forecast to rise by 12 percent this year. The CAAV says 50 international airlines are currently operating in Vietnam. Over US$480 million invested in HCM City IPs, EPZs Ho Chi Minh City’s Industrial Parks (IPs) and Export Processing Zones (EPZs) have attracted more than US$480 million worth of investment over the past nine months, up nearly 50% compared to the same period last year. The Ho Chi Minh City Export Processing and Industrial Zones Authority (HEPZA) reported foreign direct investment (FDI) capital contributed US$341.9 million, an increase of 114.7%. Japan’s US$31.95 million in capital placed it first among foreign investors, followed by Singapore (US$16.75 million), Australia (US$9.8 million), and Taiwan (US$3.5 million). Meanwhile, Domestic business investment fell 15.69% to US$138.8 million. Industries including food (US$37 million), engineering (US$21.521 million), electronics (US$10.164 million), and software (US$8.4 million) contributed the majority of the total. IPs and EPSz were home to 1,263 valid projects worth US$7.49 billion by the end of September, 502 of which—or US$4.526 billion—are majority FDI-funded. Their exports climbed 6.2% to US$3.4 billion in the reviewed period while imports fell 10.7% to US$2.5 billion. Imports declined as a result of the continuing economic downturn, contract deficiencies, and the increasing costs of input materials. HCM City has pledged to address any difficulties encountered by businesses operating in the IPs and EPZs, organise regular dialogues with the business community, accelerate administration reform, and complete Hiep Phuoc IP’s Vietnam-Japan technological zone in the hopes of attracting additional Japanese investors. Japan to consume Vietnamese tuna Japanese businesses are interested in tuna products from Binh Dinh, Phu Yen, and Khanh Hoa, provided they meet the usual quality and hygiene standards. Binh Dinh Provincial People’s Committee Chairman Le Huu Loc revealed the information after attending a recent trade promotion conference in Japan. He said Japanese businesses pay special attention to ocean tuna quality depending on processing and preservation techniques rather than fishing methods. Binh Dinh province fishermen have caught more than 7,320 tonnes of tuna since the beginning of 2013 but export prices are falling. Loc said Japan is also interested in hiring Vietnamese migrant agro-forestry and seafood labourers. Employees will be trained in how to harvest, process and preserve farm products, including tuna.  The provincial Department of Labour, Invalids and Social Affairs is developing plans to send workers to Japan, majoring in tuna processing and preservation. Replanting coffee in Highland provinces faces challenges Many coffee areas in the highland provinces have become old and giving low productivity, but replanting of these coffee areas is proving to be a serious challenge. With an area of 450,000 hectares under coffee, the highlands are considered the coffee basket of the Country. However, statistics show that nearly 40 percent of coffee area or more than 120,000 hectares of the plantation are is now old and stunted. This area will rise to about 200,000 hectares by 2015 and to 350,000 hectares by 2017. In order to deal with this situation, farmers in the highland provinces are considering cutting down old coffee trees to grow new ones; however, this is not proving easy. Nguyen Van Hai, a farmer in Ia Yok Commune in Ia Grai District in Gia Lai Province, said that replanting coffee trees always faces difficulties as cutting down coffee trees affects farmers’ immediate income. Moreover, the cost for replanting, including seedlings, fertilizers, and technology, is worrisome. Calculations show that it costs VND100-160 million to replant one hectare of coffee trees. Replanting also causes headaches to coffee companies. Nguyen Dai Ngoc, Director of Ia Grai Coffee Company, replanting has many obstacles, especially when most banks have tightened credit. Therefore, the company has just replanted around 100 hectares out of 300 hectares. According to Hoang Van Cach, Deputy Director of Ia Sao 2 Coffee Company under the Vietnam National Coffee Corporation, the cost for replanting coffee trees is fairly higher than most coffee companies can afford. Hence, commercial banks should consider lending policies to help coffee companies with replanting process. The Bank for Agriculture and Rural Development (BARD)runs a credit package of VND10 trillion for coffee replanting in highland provinces to soothe pressure on coffee growers. In Lam Dong Province, the lender has so far disbursed more than VND83 billion to more than 1,000 clients to replant an area of 2,362 hectares. Mr Nguyen Van Chieu, Director of BARD in Lam Dong said BARD's loan is to meet with coffee companies' demands. Clients are touching with priority policies. However, in order to bring effectiveness to the coffee replanting program, besides investment capital, farmers and relevant departments should also resolve related issues. Nguyen Van Son, Deputy Director of Department of Agriculture and Rural Development in Lam Dong Province, said that control on seedlings should be paid most attention. Currently, there were around 80 coffee seedling providers in the province with registered capacity of 4.6 million of coffee seedlings annually. However, their actual capacity just accounted for 60-70 percent of registered capacity so farmers had to use seedlings with unclear origin and of poor quality. In addition, replanting should be applied appropriately with conditions of each place, instead of being applied inflexibly in accordance with general process. Source: VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VIR